2024 Self-Insured Resolutions – Workers Comp Benefits Paid From Your Budget
The 2024 Self-Insured Resolutions should start with examining the 2023 Self-Insured Resolutions. Every year we hear from the self-insured article and newsletter readers reminding me to update last year’s resolutions.
The 2023 self-insured Workers Comp resolutions can be found here. Did you create a list and keep them? The dynamics of self-insurance change more slowly than other types of Workers Comp insurance. Let us look at a summary of 2023 self-insured resolutions with my comments on any 2024 changes.
- You are paying directly from your budget. Nothing changed with this one for years. No cushion exists when compared to a voluntary market policy. Having immediate online access to your claims information remains critical. The self-insured account is always 100% funded directly out of company funds. Your organization is not “outside the worker’s comp system.” Your company is more in it than other workers comp insureds.
- Those festering medical-only claims usually turn out to be the worst. The pandemic effect is still in place. Injured workers understandably may have not sought treatment as much as needed for minor claims. A quick informal conversation with even the workers who sustained very minor injuries may be worth the time investment. Check out this article on claims festering. If someone were to ask me what my biggest concern post-pandemic would be – claims festering due to non-treatment of minor claims carried over from 2021 until now.
- Is your company still large enough in a state to justify self-insurance? Obtaining a voluntary market policy quote and possibly an alternative market insurance quote may be worth the effort for comparison purposes. Do not turn self-insurance into a vanity project.
- Having a working relationship with your claims adjusters becomes a must from day one. See #1 above. With so many adjusters now working remotely, a working relationship with your TPA’s claims adjusters may take more time, The number of an account’s claims adjusters may be more than in the past. File assignment may not come from a central claims office. Emailing them has been and will be the best way to contact them or provide them with claims information. The rate of adjuster turnover stayed at prior levels.
- Resetting your level of reinsurance can be tricky. In prior years, I had no solid recommendation on how to calculate the level of reinsurance you may require to be a “fully covered entity.” See the Bouns #11 suggestion below for a recommended conversation.
- Looking at other insurance markets. The alternatives to self-insurance have become a cottage industry of sorts. After the pandemic, this resolution does not seem to have changed other than the Fed Rate that we all are having to deal with through 2023. PEOs have become a very viable option since the start of 2020. Yes, PEOs consist of returning to more of a premium structure than resembling self-insurance.
- Intensify the use of My Six Keys. The keys have helped self-insureds very often over the last 20 years. See this page for the Six Keys. You probably already know them. The keys have not changed since the 1980s. <<That sentence made me feel old.
- Medical networks become more critical to self-insured success over the years. Having an industrial-minded physician with a good bedside manner makes claims costs go down. Remember, you are spending directly out of a budgeted account. The next article that I am writing presently comes from a WCRI webinar on Access and Time To First Treatment. If I were going to highlight the one number in red that costs a self-insured program the most, this would be it.
- Keep your C-Level Executive or company owners updated. This resolution becomes even more important in 2024. If you are working remotely at least part of the time, the task of updating the C-Level Executives may be neglected or delayed. Carbon copies of certain emails can keep them updated on the program.
- Watch the budget for expenses (ALAE) that are not related directly to claims payments. This is still very important. ALAE includes defense attorneys, medical bill processing, and medical networks to name a few providers in this category. J&L has seen sharp increases in this area in 2023.
- Have a conversation with the Actuary who sets your LDF (Loss Development Factor). If you do not have an LDF calculated each year, your program is operating your budget without GPS = lost. Many self-insureds do not question or at least discuss their LDF other than looking at the actuary’s report.
I recommend that you first look at the 2022 Self-insured resolutions. I know those are two years old. The 2022 resolutions are more comprehensive and a good article for reference. The 2024 self-insured resolutions do have inflation as an unspoken heavy cost variable.
For a list of resolutions for the past 15+ years, click here.